A newspaper paywall done right

By Felix Salmon
March 15, 2011
Alan Mutter has a great example of how to put up a paywall the right way.

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Alan Mutter has a great example of how to put up a paywall the right way. The Augusta Chronicle put a paywall in place in December — and since then traffic is up by 5%. (One proviso here: that seems to be a year-on-year comparison, and so traffic might have fallen from its levels immediately before the paywall was implemented, the numbers are unclear.)

The Chronicle’s paywall is both cheap and porous. It’s on a meter system, with readers allowed to read 25 “premium articles” per month before they’re asked to pay. Taking a leaf from the Economist’s book, the Chronicle defines premium content as anything which appears in print. Online, however, it’s very unclear what counts as a premium article, and in reality most readers will never come close to that limit.

Once you’ve reached the limit — something only the most loyal readers do — you’re asked to pay the low price of $6.95 a month for full digital access. If you’re a print subscriber, which is likely, the price is even lower — just $2.95 per month.

As a result, the number of people buying digital subscriptions is low. But there’s no reason why paywalls should be hugely remunerative right out the gate.

Executive editor Alan English understands very clearly that the value of paywall need not reside in its revenues: “The act of placing a value on our journalism may be more important than any penny we ever collect,” he told Mutter. “It’s a powerful statement from the publisher and positions us distinctly in the market.”

In other words, the idea here is that people who read the Chronicle’s website are now being told quite explicitly that they’re reading valuable journalism. That, in turn, means that they will value and respect it more than they would some free sheet.

And once the paywall is securely in place, the Chronicle can tighten it up slowly, over time, with subscription prices rising and the monthly quota falling. (As indeed it has already fallen: at launch the meter was placed at 100 premium articles per month.)

I said back in November, just before the Chronicle paywall was launched, that if I was charged with maximizing paywall revenue, I’d start at just a buck or two a month, to attract as many subscribers as possible and to get them used to the idea of paying for content online. Once the subscriber base hit a critical mass, then I’d start raising the rate, as quietly as possible. It would take a few years, but the end result would be many more people paying for their online subcription than if you started off with a rate remotely comparable to the price of the print subscription.

The Chronicle team seems to understand this; it remains to be seen whether the executives at the NYT will work it out as well. I’m not a fan of the NYT paywall, partly because its readers already value its journalism very highly and so it’s less in need of signaling mechanisms than the Chronicle is. On top of that, nytimes.com is an important part of international web-based conversations in the way that chronicle.augusta.com can never be, and so the downside to the NYT if it gets this wrong is much larger.

Now that the decision to launch an NYT paywall has been made, however, and tens of millions of dollars have been spent developing it, I do hope that they will be smart enough to roll it out slowly, with a low price and high quota for the first few months. If they do that and traffic doesn’t fall, they’ll be much better positioned over the long term than if they come out of the gate annoying a lot of readers who are currently not willing to pay for news online.

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Comments
3 comments so far

Times should charge $5 a year. That would bring $50M in subscription revenue.
Smaller papers can charge more per month because the information they offer unique information. Ain’t nobody but the August, GA, paper gonna tell you about Augusta, GA.
The Times doesn’t offer unique information. What the Times writes about is also covered by WSJ, FT, Reuters, AP and about a gazillion bloggers.
The Times offers unique breadth – go through the Times front and you feel like you’ve gotten a comprehensive scan on the news.
It also offers perspective – not just the columnists but the idea that the Times is the mouthpiece of sober establishmentarians.
Those aren’t as valuable as unique content, so they can’t charge as much as the Augusta paper can. However, they can get so many subscribers, they will more than make up for it.

Posted by RZ0 | Report as abusive

Felix, thank you for your insight. The “metered” concept is an interesting one and seems to have especially strong merit in the context of an already established paper where publishers are concerned about the public outcry to a paywall. We worked with a local newspaper who had not transitioned their content online and we were able to start them off, with a paywall at full price, right from the beginning with strong success. An effective strategy for transitioning a paper that has already made itself available online would require more thought and might do well to include a metered approach.

You touched on the concept of your “most loyal” readers. My colleague published an article on the subject that takes a different approach – I’ll include a link below and would appreciate your thoughts!

http://sabramedia.com/blog/what-online-n ewspapers-can-learn-from-social-networks

Posted by JonathanWold | Report as abusive

Felix, thank you for your insight. The “metered” concept is an interesting one and seems to have especially strong merit in the context of an already established paper where publishers are concerned about the public outcry to a paywall. We worked with a local newspaper who had not transitioned their content online and we were able to start them off, with a paywall at full price, right from the beginning with strong success. An effective strategy for transitioning a paper that has already made itself available online would require more thought and might do well to include a metered approach.

You touched on the concept of your “most loyal” readers. My colleague published an article on the subject that takes a different approach – I’ll include a link below and would appreciate your thoughts!

http://sabramedia.com/blog/what-online-n ewspapers-can-learn-from-social-networks

Posted by JonathanWold | Report as abusive
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